Tax uncertainty in Washington is setting off a mad scramble among
wealthy taxpayers and charities to maximize donations before the end of
the year.

Their worry: The tax deduction for charitable giving, a fixture of
the tax code for nearly a century, is coming under pressure as part of a
broader fiscal agreement now being hammered out on Capitol Hill. ... The possibility of a deduction limit is prompting many charities to ramp up their collection efforts. ...

Many taxpayers are piling into "donor-advised" funds such as those run
by Fidelity, Schwab and Vanguard. Such funds enable givers to donate now
and secure a full deduction for 2012, while pushing decisions about
charitable gifts to specific causes into the future. After money goes
into such a fund, it is invested and can grow tax-free until the donor
tells the sponsor which eligible nonprofits to send checks to—at which
point there is no deduction. ...

People who donate now are taking a gamble. If lawmakers don't cut the
charitable deduction and allow the top tax rate to jump to 39.6% as
scheduled in 2013—an unlikely but possible outcome—taking a deduction
next year could be more valuable. ...

Charities and tax advisers are urging donors to use an additional tax
break—employed by Warren Buffett and other wealthy taxpayers—that could
disappear or be diminished in a fiscal agreement. Under current law,
donations of assets that have risen in value, such as shares of stock,
often qualify for a deduction at the full market price, enabling donors
to skip paying capital-gains tax on the appreciation.

With the stock market having recovered much of its losses from
2007-09 and the possibility of deduction limits next year, many advisers
say now is a good time to give stock.